President grants permanent normal trade relations to China

Associated Press

Published Friday, December 28, 2001

CRAWFORD, Texas -- President Bush granted China permanent normal trade status Thursday, ending a quarter-century policy of using access to U.S. markets as an annual enticement to the communist giant to expand political and economic freedoms.

The president's decision made a final act to yearly battles in Congress since 1980 that at times divided the Democratic Party during the Clinton years. It was set up by China's admission last month to the World Trade Organization.

Bush called the trade proclamation the "final step in normalizing U.S.-China trade relations" and said it would open up the vast Chinese markets to billions of dollars in American goods.

The new trade status takes effect Jan. 1, Bush said in the announcement released in Crawford, Texas, where he is vacationing.

"This is the final step in normalizing U.S.-China trade relations and welcoming China into a global, rules-based trading system," he said.

Technically, Bush's proclamation formally removed China from having to adhere to the 1974 Jackson-Vanik Amendment to the Trade Act of 1974. The amendment, initially aimed at the former Soviet Union's restrictions against Jewish emigration, withholds normal trade relations with communist states that restrict emigration.

Since 1980, China has enjoyed temporary normal trade relations with the United States under annual presidential waivers of the law.

But each waiver has triggered debates in Congress over China's record on human rights and weapons proliferation abuses.

The last one occurred in July, when the House voted 259-169 to approve Bush's waiver this year, the last that will be necessary.

The annual congressional battle pitted American business and its Republican allies against big labor and its Democratic supporters. Former President Clinton, at odds with many in his own party, started the process of moving China toward permanent trade status before he left office.

Congress last year granted the permanent status to China contingent upon its entry into the WTO. Its application was accepted formally at the WTO's annual meeting last month in the United Arab Emirates.

The annual struggle also inflamed tensions with China each year and prompted worries in that country every time it arose.

China and the United States reached an agreement, as part of China's WTO entry, that will lower China's tariffs on U.S. goods and open up its service sector to American companies.

China's tariffs on U.S.-made goods are to fall from an overall average of 25 percent to 9 percent by 2005. Duties on America's primary farm products are to drop from 31 percent to 14 percent.

China has an $80 billion trade surplus with the United States.

Bush has long supported trade with Beijing, even during the standoff over a U.S. spy plane that collided with a Chinese jet fighter and made an emergency landing on Chinese territory early this year.

In asking Congress for a temporary extension in June, he argued normalized relations would benefit the American economy and be critical to promoting an "economically open, politically stable and secure China."

Bush argued that U.S.-China trade benefits both American farmers, who last year exported to China and Hong Kong goods worth more than $3 billion, and American business, which last year increased overall exports to China by 24 percent.